Tensions and ambivalences

From the beginning of JAS’s career to his last writings, his work mirrors the tensions which he diagnoses with respect to the reality of modern capitalism: he has a genuine taste for distinctions to be used for purely analytical purposes, suggesting concepts such as “methodological individualism” or “analytical egalitarianism”.

Those declarations notwithstanding, Schumpeter does not pay much tribute to his “Monroe doctrine” in his main contributions to economics and social theory. The various types of agency relevant in the context of innovation processes make it impos­sible to steer clear of culture and psychology as determinants of behavioural tendencies. From the beginning of his career to his last writings, JAS takes recourse to economic sociology, psychology and history (cf. Schumpeter 1949b) whenever he thinks that the methods of pure economics and econometrics are insufficient. Examples include not only the characterization of entrepreneurial agency, but also the fiscal sociology introduced in his great essay on the fiscal crises of the tax state (1918), and the kind of behavioural public choice reasoning suggested in Capitalism, Socialism and Democracy (1942).

As indicated above, Schumpeter’s perception of the intricate nature of economics and of rationalization as a unique historical process with contradictions and unintended turns is the basis of subtle reflections. But in his work as an economist, it leads to tensions which remain unresolved. In his ambitious project of an explanatory approach to the historical process of capitalist development (cf. Schumpeter 1949b), the divergent theo­retical perspectives are reflected by tension, such as the tension between entrepreneur-led creative destruction and the rationalized process of managed innovation (see Andersen 2009: 167). Those tensions are situated at the core of Schumpeter’s uniqueness. They are deeply related to his character as a thinker. Moreover, they are related to profound questions regarding theoretical knowledge of socio-economic affairs: Schumpeter is a theorist of the seamless whole of the social process evolving in historical time, but he also emphatically endorses the principles (and the dos and don’ts) of economics as a special­ized science. Unfortunately, the socio-economic theory of the seamless whole can hardly be approached by research strategies guided exclusively by those dos and don’ts. When approaching the seamless whole, a theoretical horizon beyond the specialized discipli­nary research programmes (which are necessarily based on bold abstractions) seems not only useful, but indispensable.

Those tensions cannot be easily reconciled. What can be done is the following: (1) extend the scope of pure economics towards a wider set of phenomena, including dynamic and evolutionary processes; and (2) develop theoretical discourses in which the interdepend­ences of the seamless whole beyond the purely economic sphere can be approached and theorized. The latter requires a high degree of intellectual alertness in order to facilitate suitable changes of levels, frameworks and perspectives, and it requires a rough archi­tecture organizing the various levels of argument and perspectives within a provisional order. Under those preconditions, (2) may facilitate the finding of new combinations. It is obvious that strategy (1) is pursued in Entwicklung (1912, 1934) and in Business Cycles (1939). Elements of (2) can be found in all of his major works and are looming particu­larly large in his writings on the history of the subject. Indeed, Schumpeter’s references to the specific nature of economics are not confined to tangential hints and implicit mes­sages scattered throughout his oeuvre. Important and explicit references can be found in his works on the history of economic thought and in shorter essays on the foundations of modern economics (Schumpeter 1915, 1949a).